After several years of development, the number of sellers on Amazon and Shopify is increasing, and the once independent individual merchant group is gradually converging.
Before Shopify gained momentum, the Amazon platform had been evolving for several years. Many merchants in the platform sell goods wholesaled from well-known brands. Over time, escalating competitive pressures and declining profit margins among dealers have forced practitioners to seek other development opportunities – building their own brands. Click to start the independent station operation tour
Many businesses are tailoring their own business ecosystem around Amazon, for example, most merchants will rely on FBA for shipping, and it will become more difficult and costly to switch to other channels. However, because Amazon is still the largest e-commerce company in the United States, according to past risk estimates, merchants to establish a business ecology that relies entirely on amazon platforms, forming asset exclusivity will be the right choice.
But outside of Amazon's platform, the e-commerce industry has also shown rapid development momentum, such as Shopify's scale of almost 40% of Amazon. Shopify is just one of many e-commerce companies, and its development results also illustrate the transformation of D2C commerce and the rising acceptance in the market. Nowadays, the penetration rate of retail e-commerce is getting higher and higher, and more and more consumers have changed their consumption habits and found the online business of their choice.
Many sellers who focus on operating Amazon stores have to face competitors who come to challenge Amazon's platform, and eventually the market will show a multi-legged diversification pattern - presumably, the next competitor will also be a D2C platform. So instead of expecting Walmart, Target, Wish, Google, and many other retail giants to take a hit on Amazon, think about whether Shopify will be the first to stand up against Amazon.
Ten years ago, few Amazon sellers thought of setting up their own stand-alone site. Nowadays, more and more merchants are learning how to build websites and operate to obtain private domain traffic. When Amazon realized this, the official platform tried to incentivize sellers to direct external traffic to Amazon, rather than the merchants' own independent websites. Even though Amazon still insists that e-commerce is still thriving around Amazon, in fact, even those sellers who have gambled their lives on operating Amazon stores are gradually changing their platform operation strategies. (How do Amazon sellers market promotions?) )
According to Similarweb data, shopify's traffic last quarter surpassed that of e-commerce rival Amazon for the first time.
In the 3 months to June, Shopify's independent websites had an average of 1.16 billion unique visitors per month. Over the same period, Amazon's average monthly unique visitor reached 1.1 billion. This gap will continue to widen during the quarter, with the Shopify site expected to attract about 1.22 billion monthly unique visitors, while Amazon's unique visitors will be 1.13 billion.
Similarweb's data also shows that shopify sites have seen phenomenal growth since May 2020, with an increase of as much as 108.5%, compared to Amazon's 9.9%.
Ed Lavery, director of investment solutions at Similarweb, told the media: "This is the first time we have seen Amazon have such a strong competitor in the market coverage. ”
*This data includes global web traffic from mobile and desktop users, but excludes personal mobile apps. At the same time, the data provided by Similerweb also excludes the traffic that Amazon gets from other sectors such as Prime Video.
While the two e-commerce companies aren't direct competitors — because Shopify doesn't sell products directly to consumers or operate platforms like its competitors — they do belong to the same online tech companies, and it's inevitable that there will be competition in the market. After all, Shopify provides a variety of online businesses, supporting merchants to build online sales networks.
In response to Shopify's rapid rise, Amazon last year set up an internal working group called Project Santos to crack down on the core businesses of Shopify's services, business Insider reported.
This forced Amazon to develop its own point-of-sale (POS) system.
According to the Insider website in early September, one of the team's early projects was a new type of point-of-sale system.
Last year, Amazon's total revenue was about $386 billion, while Shopify's total revenue was about $2.9 billion. Shopify's merchants sold a total of $490 billion worth of merchandise with £120 billion in sales.
According to Lavery, merchants see Shopify's platform as more impressive than Amazon's when it comes to user fees, pricing flexibility, and customer data.
"Shopify provides a more vendor-friendly environment to distribute their products." He said it was an issue that Amazon needed to pay more attention to.
Amazon sellers now have a third form: version 1.0 is a reseller platform, and advertisers and private labels on Amazon have co-created version 2.0. While current sellers — amazon sellers version 3.0 — are building Amazon's native brand, merchants in this context are paying more attention to multi-channel sales, driving traffic outside of Amazon back to the platform, and including social commerce in investment plans. The basic building blocks of the Amazon Marketplace remain the same, but sellers must adapt to the constant evolution of change and create more value in order to ultimately stand out from the competition.
If you put aside these models that have been iteratively completed, there will be no amazon seller version 3.0 today, and merchants can only be a group of resellers, and they will lose other competitive dimensions and more development possibilities.
Amazon sellers don't just want to build up a retention space for consumers based on the search algorithms, customer reviews, and store ratings provided by the platform. This type of space is too limited to allow consumers to move beyond Amazon through other routes. As a result, merchants want to be the next Anchor – the brand has used Amazon to jump off and build a fairly broad brand recognition along the way.
Amazon aggregators have also further fueled this shift. The group is creating modern brand holding companies, and targeting Amazon is only their first step — in fact, we should remove the word "Amazon" from the title of "Amazon aggregator." Because their purpose is to lure brands out of the e-commerce platform, it can only be said that the object they are looking for is Amazon's seller group, and no one knows who the next affected platform will be. But they don't plan to buy the reseller base (i.e., the few remaining Amazon 1.0 sellers).
In the past, the skill sets and tools that supported Amazon sellers were completely different compared to Shopify sellers. As a result, two distinct groups of merchants have emerged. But now, the lines between them are blurring. Shopify merchants as a private domain traffic monetization merchant group is gradually expanding in the market, at the same time, Amazon merchants are slowly joining the battle. Because most of them are struggling to convert traffic outside of their existing platforms.
For consumers, this evolution is not yet so pronounced. Many items are available for purchase on Amazon, while on Shopify they are non-selling, and Shopify does not have a central entrance like amazon's search box. Shopify has a wildly popular store app, but officials don't seem to have any intention of transforming it into a standalone shopping app. While the overlap between the two ecosystems is still small, they are both growing rapidly. For industries that are growing in parallel, sellers, retailers and brands who want to sell online don't need to hesitate too much, because whichever development model they choose is feasible.
In addition to conforming to the development trend, merchants also need to consider their positioning in the market and plan their platform operation strategies clearly in order to achieve longer-term development.